Blackwater considered itself above the law, US state department was warned

A state department investigator warned that the private security firm Blackwater considered itself above the law, just weeks before Blackwater guards shot and killed 17 Iraqi civilians, it has been reported.

According to the New York Times, Jean Richter, who was sent to Iraq to review Blackwater's operations, warned in a memo dated 31 August 2007 that little oversight of the company, which had a $1bn contract to protect US diplomats, had created "an environment full of liability and negligence".

Blackwater guards "saw themselves as above the law", Richter wrote in the memo. His inquiry was abandoned after Blackwater's top manager said he could kill the government's chief investigator and no one could or would do anything about it as it was in Iraq. The threat came from Daniel Carroll, Blackwater's project manager in Iraq, during a meeting with Richter and another state department official, Donald Thomas, to discuss the review, which had uncovered overbilling and complaints about a cafeteria in Blackwater's compound.

Richter wrote: "I took Mr Carroll's threat seriously. We were in a combat zone where things can happen quite unexpectedly, especially when issues involve potentially negative impacts on a lucrative security contract."

US embassy officials in Baghdad sided with Blackwater rather than the state department investigators as tension escalated between Richter and Blackwater in August 2007, the Times reported on Monday. The officials told the investigators they had disrupted the embassy's relationship with the security contractor and asked them to leave. Once back in Washington, Richter wrote his 31 August memo to state department officials to warn of lax oversight of the company.

The state department has not commented on the aborted investigation. A spokesman for Erik Prince, the founder and former chief executive of Blackwater, who sold the company in 2010, told the Times that Prince had never been told about the matter. Blackwater was renamed Xe Services in 2009. After Prince sold the company, the new owners named it Academi. In early June, it merged with Triple Canopy, one of its rivals for government and commercial contracts to provide private security. The new firm is called Constellis Holdings.

On 16 September 2007, Blackwater guards shot and killed 17 Iraqis at Nisour Square. A nine-year-old boy was among the civilians killed. Federal prosecutors later said Blackwater personnel had shot indiscriminately with automatic weapons and heavy machine guns, and had used grenade launchers. Four Blackwater guards involved in the shooting are on trial in Washington, the government's second attempt to prosecute the case in a US court after previous charges against five guards were dismissed in 2009.